Initial insured loss estimates for Hurricane Ian range up to $75 billion, a Fla. record

Insured loss estimates from Hurricane Ian range from an initial $42 billion to $75 billion, making it the most expensively damaging storm in Florida’s history. And most of the estimates don’t even include payouts by the National Flood Insurance Program or expected settlements from litigation.

Boston-based Verisk Extreme Event Solutions, put the loss estimate for Ian-related onshore property at $42 billion to $57 billion. The high-end number would exceed the state’s record damage from 1992’s Hurricane Andrew which inflicted Florida with an inflation-adjusted $55.7 billion in property losses.

CoreLogic, a research firm that estimates losses from natural disasters, predicted wind damage totals ranging from $22 billion to $32 billion, with additional flood damage estimates of $6 billion to $15 billion.

Insurers have so far reported about $1.44 billion in preliminary claims, an amount that is expected to rise quickly. A forecast from data firm Enki Research published Saturday estimated that total damages will amount to at least $66 billion but could rise as high as $75 billion.

"Largest loss in Fla. history"

“In nominal dollars, Hurricane Ian will be the largest hurricane loss in Florida history,” says a report from Karen Clark and Company, a catastrophe modeling firm in Boston. “The total economic damage will be well over $100 billion, including uninsured properties, damage to infrastructure, and other cleanup and recovery costs.”

Using high-resolution hurricane reference models, KCC estimates the privately insured losses from Hurricane Ian will be close to $63 billion, with $200 million in the Caribbean and the rest from wind, storm surge, and inland flood losses in the US.

“Hurricane Ian will be a challenging storm for insurers due to the tremendous amount of coastal flooding and the unique nature of the Florida market with respect to a likely high proposition of litigated claims,” the KCC report said.

Verisk’s higher estimates include damage where Ian also made landfall in South Carolina, the company said.

Wind damage was observed in all the areas impacted by Hurricane Ian’s windfield, Verisk said. Damage was more severe in and around the areas where Ian made landfall in southwest Florida. It ranged from significant loss of roof covers in residential homes to torn up roof membranes in commercial structures. Extensive damage is also seen to elements of building components and cladding.

“Storm surge also caused massive destruction to communities along the western coast of Florida where Ian made landfall,” the report said. “Residential construction in these areas is predominantly founded on slabs that do not afford a lot of elevation above the local ground surface. Surge damage caused collapse of several rows of beachfront residential homes. In some cases, homes were dislodged from their foundations.”

Manufactured homes constituted a significant portion of the residential inventory in southwest Florida when Ian made landfall. Several manufactured home parks in these areas saw massive damage including loss of roofs, damage to wall siding and near total destruction.

Estimates spur calls for change

The damage estimates from Ian have revived calls for changes in insurance coverage, federal flood insurance policies and building codes to better protect vulnerable areas and reduce claims.

“While legislative and policy changes should help to reduce the proportion of litigated claims,” said the KCC flash estimate. “The large proportion of properties with both wind and water damage may induce more litigation. The KCC estimate includes a comparable proportion of excess limitation as occurred in Hurricane Irma.”

Florida experts worry the state’s struggling property insurance system will collapse in the wake the storm and at the least could cause already high premiums to skyrocket.

State Sen. Jeff Brandes, a Republican from Pinellas County, has frequently called for strict insurance and litigation reforms to control spiraling costs. He called on the governor and the legislature to find solutions fast if they want to save the industry.

“If I’m governor, maybe not this week, but in the next couple of weeks, I’d fly in the brightest minds in the insurance field and figure out how to fix this problem,” he told the Orlando Sentinel.

Otherwise, he said, rates will rise another 30% to 40%, just as they have for the past few years.

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].